Why Japanese Investors May Pull Back from Foreign Bonds And How it Affects the Dollar

Why Japanese Investors May Pull Back from Foreign Bonds And How it Affects the Dollar

[Music] Japan of course is a very different story. This is because inflation in Japan is still running hot. CPI inflation came in at 3.6% last month. High inflation is weighing on household confidence in the approval rating of Prime Minister Ishiba’s cabinet that fell to 20% just two months before the crucial upper house elections. The Bank of Japan is tapering its purchase as a government bonds. Despite the gentle pace of the tapering, long-term Japanese bond yields have been spiking lately. Increasing Japanese bond yields are likely to sap the appetite of Japanese investors for foreign bonds.

Inflation in Japan is heating up, with CPI at 3.6% last month. As household confidence plunges and PM Kishida’s approval drops ahead of key elections, the Bank of Japan is gently tapering bond purchases. But even that has sent long-term yields spiking—making foreign bonds less attractive to Japanese investors.

#Japan #Inflation #Bonds #BOJ #Economy #Investing

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